Legislature(2023 - 2024)BARNES 124
02/05/2024 03:15 PM House LABOR & COMMERCE
Note: the audio
and video
recordings are distinct records and are obtained from different sources. As such there may be key differences between the two. The audio recordings are captured by our records offices as the official record of the meeting and will have more accurate timestamps. Use the icons to switch between them.
Audio | Topic |
---|---|
Start | |
Executive Order 135 - Eliminating the Alaska Safety Advisory Council | |
HB251 | |
HB237 | |
HB289 | |
Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
+ | TELECONFERENCED | ||
*+ | HB 289 | TELECONFERENCED | |
+ | TELECONFERENCED | ||
+= | HB 251 | TELECONFERENCED | |
*+ | HB 237 | TELECONFERENCED | |
HB 289-BUSINESS LICENSE FEES 3:47:45 PM CHAIR SUMNER announced that the final order of business would be HOUSE BILL NO. 289, "An Act relating to business license fees; and providing for an effective date." 3:48:36 PM JULIE SANDE, Commissioner, Department of Commerce, Community, and Economic Development (DCCED), began the PowerPoint presentation, titled "Business License Fees" [hardcopy included in committee packet], on slide 1. She explained that the bill proposes to return business license fees to the amount they were in 2008. She shared that she serves on the Alaska Tourism Industry Board as well as the Alaska Seafood Marketing Institute (ASMI) Board, and she highlighted the marketing work that both organizations do. She shared that the governor has an interest in reaching out to business owners to learn more about what they need in order to conduct business in Alaska. She said that the needs included workforce, housing, childcare, and energy costs; the prevailing need is determining how to "tell our story better." She said she is not interested in building government just to build government; therefore, effort was made to fund costs within the department. 3:53:13 PM SYLVAN ROBB, Director, Division of Corporations, Business and Professional Licensing, Department of Commerce, Community, and Economic Development, moved to and read slide 2 of the presentation, which read as follows [original punctuation provided]: What Does HB 289 Do? Increases regular business license fees from $50 to $100 per year Increases business license fees for sole proprietorships owned by a disabled veteran or individual who is 65 years of age or older from $25 to $50 per year Increases tobacco endorsement fees from $100 to $200 per renewal MS. ROBB transitioned to and summarized slide 3, which read as follows [original punctuation provided]: Why Increase These Fees? All funds received each fiscal year in excess of what's required to run the business licensing program are deposited into UGF Increasing business licensing fees is a way to generate additional revenue for the State of Alaska without heavily impacting one profession or industry over another 3:55:04 PM MS. ROBB moved to slide 4 and summarized the slide, which read as follows [original punctuation provided]: When is a Business License or Tobacco Endorsement Required? A business license is required for the privilege of engaging in a business in the State of Alaska (AS 43.70.020(a)) "Business" means a for-profit or non-profit entity engaging or offering to engage in a trade, a service, a profession, or an activity with the goal of receiving a financial benefit in exchange for the provision of services, or goods, or other property. (AS 43.70.110(1)) A person who sells cigarettes, cigars, products containing tobacco, electronic smoking products, or products containing nicotine as a retailer must have a business license and a [tobacco] endorsement. (AS 43.70.105(b)) MS. ROBB advanced to and read slide 4, which read as follows [original punctuation provided]: When is a Business License Not Required? Business license exemptions (AS 43.70.105): Fisheries business Sale of liquor under a license issued under AS 04.11 Insurance business Mining business Supplying services as an employee Furnishing goods or services by a person who does not represent to be regularly engaged in furnishing goods or services Activities of an investment club as defined in AS 43.70.105(7) Bank organized under AS 06.05 or the laws of another state National bank chartered by the U.S. Credit union organized under AS 06.45 or the laws of another state Credit union regulated by the National Credit Union Administration Mutual savings bank chartered under AS 06.15 or organized under the laws of another state 3:56:53 PM MS. ROBB moved to slide 6 to present a graph depicting the number of business licenses and pointed out that the licenses continued to increase. She advised that the 2023 figure of 22,623 business licenses is the number of people who purchased a business license that, not the total number of licenses in Alaska, which is 100,000. She moved to slide 7 to show a graph of the number of businesses. She advanced to slide 8 to present a graph that shows the number of businesses licenses that hold endorsements. Ms. Robb transitioned to slide 9 to showcase a graph of business license revenue. She concluded on slide 10 with the resources used in the PowerPoint. 3:59:46 PM REPRESENTATIVE FIELDS asked, if all $2.7 million were put toward additional staff, how many staff that would support and whether it would speed up current backlogs. MS. ROBB explained that current professional licensing statutes are separate from business license revenue. She said the division is required to charge an amount for the professional licensing fees that is about equal to the cost to run the program. She noted that the legislature granted the division 12 additional positions. REPRESENTATIVE FIELDS asked if the bill could be tweaked to provide more help and augment the fees. 4:01:19 PM CHAIR SUMNER commented that Representative Fields is describing a fee, whereas this is a tax. 4:01:28 PM REPRESENTATIVE SADDLER asked about Commissioner Sande's comment that the bill would restore business license fees to pre-COVID levels. COMMISSIONER SANDE reiterated that the bill would restore the fees to 2008 levels. REPRESENTATIVE SADDLER sought clarification that the fee went from $100 to $50 in 2008 and is now being proposed to be returned to $100. He further asked if a higher fee was considered to account for inflation. COMMISSIONER SANDE responded that, as a business owner, the change from $50 to $100 isn't going to cause her to decide not to go into business. She said the division is comfortable with $100 and may consider $150 in the future. REPRESENTATIVE SADDLER pointed out that the fiscal note assumes no growth in the number of licenses. 4:04:09 PM MS. ROBB explained that fiscal notes do not account for inflation. She said it would be challenging to project the increase in business licensing that the division anticipates in the future. In response to a follow-up question, she explained that business license fees were waived during the COVID pandemic; that may have artificially influenced the number of businesses licenses that were given out. She said there has been an increase in business licenses over the past few years. CHAIR SUMNER advised members that Mr. Gunther was present to explain the difference between a tax and a fee. 4:06:50 PM CONRAN GUNTHER, Attorney, Legislative Legal Services, Legislative Affairs Agency, said he is not aware of any Alaska cases that distinguish between a fee and a tax. He explained that a tax is a levy of funds to raise revenue for general government purposes, while a fee is a voluntarily incurred change to obtain a government benefit with fees that relate to the cost of the benefit. CHAIR SUMNER asked, if a proposal were made to double the fee with all the additional revenue going to the general fund, whether that would be a tax. MR. GUNTHER explained that under Article IX, Section 7, of the Constitution of the State of Alaska, any proceeds of a state tax or license can be dedicated and go to the general fund. He shared that there may be other examples around whether a fee is excessive. 4:08:50 PM REPRESENTATIVE PRAX asked if the licensing fee is like the driver's license fee. MS. ROBB explained that the fees are referred to as business license fees since that is how they are outlined in statute. She added that the legislature spoke to the fact that the money collected by the department under AS 43.70.080 should be deposited into the general fund; this indicates that additional funds would be generated beyond the costs required to run the program. 4:10:12 PM REPRESENTATIVE RUFFRIDGE asked about the fee increase not having a detrimental affect on the number of licenses issued. He commented that the fee waving during COVID might have caused more licenses to be issued. He asked what licensing fee figure would discourage someone from starting a business. MS. ROBB answered that the fee increase does not impact one industry. 4:11:52 PM REPRESENTATIVE SADDLER pointed to and read slide 3, regarding the increase of business licensing fees as a source of revenue. He asked for an explanation of how the licensing fee is a fee and not a tax. MS. ROBB answered that the department has referred to business licensing as a fee, as does state statute. She highlighted again that there is statute directing that excess funds generated return to the general fund. 4:13:51 PM CHAIR SUMNER announced that HB 289 was held over.
Document Name | Date/Time | Subjects |
---|---|---|
HB 289 Transmittal Letter 1.22.24.pdf |
HL&C 2/5/2024 3:15:00 PM |
HB 289 |
HB 289 Presentation for HL&C (Version A).pdf |
HL&C 2/5/2024 3:15:00 PM |
HB 289 |
HB 289 ver A.PDF |
HL&C 2/5/2024 3:15:00 PM |
HB 289 |
HB 289 Sectional Analysis ver A.pdf |
HL&C 2/5/2024 3:15:00 PM |
HB 289 |
HB 251 Sponsor Statement.pdf |
HL&C 2/5/2024 3:15:00 PM |
HB 251 |
HB 251 Sectional Analysis.pdf |
HL&C 2/5/2024 3:15:00 PM |
HB 251 |
HB0251A.pdf |
HL&C 2/5/2024 3:15:00 PM |
HB 251 |
HB 237 Sponsor Statement.pdf |
HL&C 2/5/2024 3:15:00 PM |
HB 237 |
HB 237 Version B.pdf |
HL&C 2/5/2024 3:15:00 PM |
HB 237 |
HB 237 Dawn Hughes Letter of Support.pdf |
HL&C 2/5/2024 3:15:00 PM |
HB 237 |
HB 237 Fscl Nt - DCC&ED.pdf |
HL&C 2/5/2024 3:15:00 PM |
HB 237 |
Fiscal Note HB0289-1-2-012424-CED-Y.pdf |
HL&C 2/5/2024 3:15:00 PM |
HB 289 |